A model of a pipeline construction on display in Brinston, Ont., one of the communities where TransCanada held information sessions on the Energy East pipeline for local residents.Dave Chan for National Post

The cancellation of Energy East is the last of the big, nation-building pipeline decisions that resulted from Prime Minister Justin Trudeau’s forced transition to greener energy.

It’s another area of the economy that Ottawa has badly mishandled. It’s based on an energy model for Canada that is a lousy fit for its geology, history, economy, and the competencies and desires of its people, particularly in Western Canada. It’s the reason Calgary’s economy is dead when it should be humming with new activity amid rebounding oil prices, and that unemployment in Alberta is so high it’s a national political embarrassment.

Energy East died Thursday after Ottawa expanded its regulatory review to include climate change impacts of the whole upstream and downstream oil industry. Proponent TransCanada Corp. said it took the decision after “a careful review of changed circumstances.” It expects to take an estimated $1 billion after-tax non-cash charge in its fourth quarter results. The decision was made after a five-year application process.

Natural Resources Minister Jim Carr insisted TransCanada pulled the plug because of business considerations influenced by the state of commodity prices.

It’s amazing how business conditions deteriorate when regulatory processes drag on forever, are changed to the detriment of the proponent and hold no promise of fairness. As they say in the business, time kills all projects.

While Energy East is over, the political outrage is just beginning and a Canadian unity crisis festering.

Montreal Mayor Denis Coderre, who is running for re-election next month, rubbed salt on Alberta’s wound by saying in a tweet he’s “very proud” of the outcome.

Alberta’s NDP premier, Rachel Notley, called the pipeline’s failure “an unfortunate outcome for Canadians. Our government has supported Energy East since the project was proposed.”

Waging war with Alberta

“Eastern politicians like Denis Coderre take pride and credit in the cancellation of energy products that would benefit the entire country. He’s proud of holding back Canada’s energy prosperity. Other provinces have declared war on Alberta. They are cheering for Canada to fail and threatening national unity. The political blockading of Canada’s energy products is not acceptable and must be fought every step of the way.”

Energy East now joins a heap of failed Canadian energy projects. The Northern Gateway pipeline, proposed by Enbridge Inc., was put out of its misery by Trudeau barely a year ago. The $36 billion liquefied natural gas project led by Malaysia’s Petronas perished this summer after years of being pushed around by regulators.

Let’s not forget the mass exodus of international oilsands companies that found opportunities elsewhere, or the exodus of capital from Canada’s own energy champions, including TransCanada and Enbridge, in favour of expansions in the United States. We can thank Trudeau’s carbon taxes and a red tape onslaught at a time of uncertain oil prices for that, too.

The Liberals are now counting on other pipeline projects that they approved, the Trans Mountain expansion, proposed by Kinder Morgan, and the Line 3 expansion, proposed by Enbridge, to move forward. Then there is the Keystone XL pipeline, which was revived by President Donald Trump.

Yet the two most significant ones, the Trans Mountain expansion and Keystone XL, are far from a sure thing. If either one doesn’t make it to the finish line, given one is stuck in the courts in B.C. and the other before regulatory authorities in Nebraska, there is no Liberal Plan B for pipelines. No new major oil pipelines are in the works.

The Liberals are banking on new investment and expertise to build alternative energy in which Canada has no strategic advantage.

The funny thing about a government that kills private sector investment and jobs to fit its re-election strategy is that it breeds mistrust among investors of all stripes.

Losing a national initiative

The loss of Energy East stings because it would have been a truly national initiative that would have benefitted Atlantic Canada and added value to Alberta’s oil by feeding refineries along the way. It would have replaced oil purchased from other countries with deplorable environmental standards and human rights records. It would have re-purposed an underutilized pipeline already in the ground for most of the way. It would have lifted Canadian oil prices and opened new markets for Canadian oil globally.

Trudeau had plenty to work with to help make it happen. Instead he let petty politicians and the environmental lobby spread fear and loathing unchecked.

Sure, some LNG projects are still in the works, but their plans will take into account whether there is a reasonable chance of success under Canada’s demanding environmental standards. With so few examples of successful energy projects in the country today, any one who dares is proceeding at their own risk.

Doug Black, senator and Calgary-based energy lawyer, said international companies are asking: “If TransCanada, one of the major companies in Canada, can’t get a project done in Canada, how can I?”